Studies Show Potential To Decrease Greenhouse Gas

(DTN) -- Recent studies conducted on energy supplementation of grazing beef cattle offer the potential to decrease greenhouse gas (GHG) emissions, specifically methane. Common practices of cattle producers can decrease the carbon footprint of beef production, but additional research will be needed to examine different ways to improve the response, according to one scientist studying the issue.

In a Great Plains Grazing webinar on Tuesday afternoon, "Great Plains Grazing," Andy Cole, research animal scientist at USDA-Agricultural Research Service Conservation and Production Research Laboratory in Bushland, Texas, reported on studies being conducted at his facility which examine the effects on the carbon footprint of grazing cattle using different feed supplementation strategies. While the results varied some from study to study, generally the research showed GHG levels could be lowered in grazing livestock.

MORE GHG FROM GRAZING?

Cole said past GHG studies on North American beef cattle production have shown about 87% of the carbon dioxide equivalent is produced while cattle are grazing. Specifically 70% is from cow/calf production, around 17% from stocker operations and just 13% is from the feedlot side, a fact that might surprise.

"This is a lot different than what most people believe," Cole said.

About 60% of GHG from beef production in North America is from enteric methane from the rumen and the lower gut, he said. Roughly 20% comes from manure and another 19% is from energy and secondary emissions.

Cole points out that enteric methane production of U.S. feedlot cattle may already be close to biologically minimized, stating it runs 2% to 4% of the gross energy intake of the animals. If you get much lower than this level, you run into problems with fermentation within the rumen of the animal, he said.

"The greatest opportunity to decrease the carbon footprint appears to be in grazing cattle," he said. "Therefore in the last several years we have conducted a series of studies to examine the effects of supplementation on the emissions from cattle grazing in different forage systems."

Because of seasonal changes in crude protein levels in native rangeland, cattlemen often have to supplement to meet their grazing cattle's nutritional needs. For a mid-sized spring calving beef cow, the amount of crude protein needs to be supplemented during the time from late fall to spring when grass begins to grow.

The effects of GHG emissions from supplements in beef cattle are not fully known, he said.

RESEARCH MIXED

In one USDA-ARS study, cross-bred steers were fed low quality bluestem hay and then were fed cottonseed meal or dried distillers grain. Methane and carbon dioxide emissions were then measured, Cole said.

Protein supplementation increased total enteric methane and metabolic carbon dioxide due to increased feed intake. However, supplementation decreased enteric methane production as a percent of gross energy intake.

The enteric methane of the steers fed DDG were somewhat lower than the steers fed cottonseed meal, he said.

Another two studies looked at cattle grazing on wheat pasture, which were then fed supplements. These steers were fed an energy supplement of steam-flaked corn, wheat midds, mineral and molasses.

As with the first study, methane and carbon dioxide levels of the steers were measured.

The results of the wheat grazing studies show methane, as a percent of gross energy intake, was decreased by 16% to 21% with corn-based energy supplementation. Methane emissions per kilogram of dry matter intake were decreased 18.5% to 20.5% with the corn-based supplementation.

While these studies are promising and energy supplementation offers potential to decrease methane emissions from grazing cattle, Cole pointed out more research is needed.

"This may include how much fat is [in] that supplement, the starch, the digestible fiber, the use of ionophores and there are some new potential methane inhibitors that may be coming onto the market in next few years," Cole said.

Other factors that could have an effect on research into how much supplementation could control GHG emissions includes certain grazing management techniques as well as forage quality, he said.

Some Environmentalists Reconsider Support for the RFS

Biofuels, once touted by environmentalists as a way to cut pollution, are now seeing support fade as the Renewable Fuel Standard (RFS), a program that puts renewable fuels in cars, has been linked by some to higher-than-expected carbon dioxide (CO2) emissions and reduced wildlife habitat.

More than 10 years after conservationists helped persuade Congress to require adding corn-based ethanol and other biofuels to gasoline, some groups now say the resulting agricultural runoff in waterways and conversion of prairies to cropland have dampened their enthusiasm for the program.

"The big green groups that got invested in biofuels are tacitly realizing the blunder," said John DeCicco, a research professor at the University of Michigan Energy Institute. He previously focused on automotive strategies at the Environmental Defense Fund (EDF). "It’s really hard for the people who really -- shall we say -- hate oil viscerally, to think that this alternative that we’ve been promoting is today worse than oil." That statement is staunchly opposed by RFS supporters, who say naysayers cherry-pick their observations.

The backlash from environmental groups could boost long-stalled congressional efforts to overhaul the RFS, including proposals to limit the amount of traditional, corn-based ethanol that counts toward the mandate, as environmentalists side with anti-hunger groups and the oil industry in calling for change.

The RFS forces refiners to blend steadily increasing amounts of biofuel into the gas supply. Most of the mandate is currently met by corn-based ethanol, which makes up nearly 10% of US gasoline and provides oxygen that helps the fuel burn cleaner.

The Natural Resources Defense Council (NRDC) said in a 2004 report that increased use of biofuels would slash global warming emissions, improve air quality and increase wildlife habitat.

Instead, RFS opponents now allege, farmers converted millions of acres of prairie grasses to grow corn for making ethanol, with fertilizer runoff contributing to a dead zone in the Gulf of Mexico. Scientists found that CO2 emissions associated with corn-based ethanol were higher than expected. And alternatives using switchgrass, algae and other non-edible plant materials have yet to see broad commercial viability.

"The ethanol policy was sold to environmentalists as something that was going to clean up the environment, and it’s done anything but," said Rep. Peter Welch, D-Vt., who is co-sponsoring legislation to revamp the RFS. "It’s truly been a flop. The environmental promise has been transformed into an environmental detriment."

Collin O’Mara, president of the National Wildlife Federation (NWF), told a House committee last month that the RFS program, created with "good intentions," has instead wreaked "severe, unintended consequences," including the loss of prairie land and water-supply damage that threatens wildlife.

Even the NRDC which once strongly supported the RFS now acknowledges "the bulk of today’s conventional corn ethanol carries grave risks to the climate, wildlife, waterways and food security."

NRDC spokesman Ed Chen said the group continues to monitor the RFS "because low-carbon cellulosic biofuels can play an important role in reducing transportation pollution,” but added that the organization is "far more focused" on other carbon-cutting strategies with more immediate climate payoffs.

Biofuel industry groups counter that alternative sources of fuel are still clearly worse for the environment. "In the absence of ethanol, your next barrel of transportation fuel is going to be coming from petroleum from fracking or tar sands or deep-water drilling," Bob Dinneen, president of the Renewable Fuels Association (RFA), said in a phone interview with Bloomberg. "So you sort of have to assess ethanol in the context of what its replacement would be, and quite frankly, by that measurement we are the stone-cold winner."

DOJ Asks Court to Keep Some WOTUS Documents Out of Admin. Record

The administrative record for consolidated challenges to the Environmental Protection Agency's (EPA) Waters of the U.S. (WOTUS) rule should not include documents that EPA and the U.S. Army Corps of Engineers – which jointly promulgated the rule with EPA – used during deliberations, the Department of Justice (DOJ) told the U.S. Court of Appeals for the Sixth Circuit in a July 22 brief.

Deliberative materials are generally not part of the administrative record because they represent the internal decision making process of the agency staff, not its final decision, the Justice Department argued.

The Justice Department said the eight internal corps memos the petitioners have sought contain "opinions, mental impressions, and staff recommendations that were shared internally among Corps and Army personnel and with Jo-Ellen Darcy, Assistant Secretary of the Army (Civil Works), in the course of interagency deliberations in connection with the Rule."

Other documents that the Justice Department said do not belong in the administrative record include the draft economic analysis of the final rule and the draft environmental assessment of the rule.

The corps memos, dating between April and May 2015, are pertinent from the perspective of business, agriculture and manufacturing groups opposed to the WOTUS rule, which would clarify which waters and wetlands fall under Clean Water Act (CWA) protections including permitting requirements.

The interest comes after other internal corps memos on the rule were leaked to the public by a member of Congress a year ago, and were sharply critical of the way the EPA wrote the draft final rule without addressing critical questions surrounding the technical, legal and economic analyses underlying the rulemaking effort.

According to the leaked memos, the support documents were "flawed in multiple respects," making it difficult for the corps to defend the rulemaking and to implement it in the field.

The Justice Department contends that the administrative record that the Sixth Circuit has amassed for this lawsuit contains at least 20,400 documents with more than 350,000 pages. These documents include the proposed and final rules as well as technical and scientific reports, scientific literature and comments submitted by the public along with the agencies' response, and are more than sufficient to inform the court about the legality of the rule, according to the Justice Department.

Anti-GMO Labeling Petition Reaches 100,000 Signatures

A White House petition asking President Barack Obama to veto the GMO labeling bill reached 100,000 signatures recently, passing the threshold needed to get a formal response from the President. However, as Politico reports, the petition is almost certainly too little too late, as Obama has already said he intends to sign the bill. In the midst of the bill getting through Congress, the White House earlier this month said the President would sign the bill; however, there is no indication when he may do so. The House and Senate passed the compromise bill earlier this month. The legislations preempts state labeling laws, such as the Vermont law, and mandate’s GMO disclosure through on-package labeling or smart labels.

Rural Group for Hillary Forms at DNC

A group called Rural for Hillary was organized earlier this week during the Democratic National Convention to begin campaign efforts for Democratic presidential candidate Hillary Clinton in rural America. While not formally affiliated with Clinton’s campaign, the group did hold a closed-door session with Agriculture Secretary Tom Vilsack earlier this week, according to the Hagstrom Report. Organizers of the group are volunteers and include Pam Johnson, former president of the National Corn Growers Association. Other organizers include AgriBank’s vice president for government affairs, Vicki Hicks, and Trevor Dean, a former Clinton aide who also worked in the Department of Agriculture during President Bill Clinton’s administration.

China Pig Prices Reaching Near Record Levels amid Flooding

Pig prices in China may climb to near record levels following floods that drowned animals and prompted fears of possible disease outbreaks. In one village alone, local reports say roughly 10,000 hogs drowned in flood waters. Flooding also raises the risk of disease, as improper treatment of corpses could cause widespread disease after flood. China is the world’s largest pork consumers and farmers in the country are increasing slaughter, including animals that aren’t fat enough, after floods in China’s central and south regions, according to Bloomberg. Pig prices may surpass the record 21 Yuan per kilogram reached in May, the equivalent of $3.15. China will import a record amount of pork this year to cover a supply gap amid declining domestic production. Output fell 3.9 percent in the first half of this year and the five provinces hardest hit by flooding produce about one-third of the country’s pork. Analysts say domestic pig prices in China surged 51 percent already this year, and Imports will surge at least 30 percent.

Dollar General Buys Walmart Express Locations, Will Expand Meat Offerings

Dollar General announced this week the discount retailer has purchased 41 former Wal-Mart Express locations across 11 states. Dollar General anticipates relocating 40 existing Dollar General Stores into the purchased sites by October. The newly-relocated Dollar General stores will use a new layout with expanded offerings such as fresh meat and produce. Dollar General also intends to operate the fueling stations in 37 of those locations, according to Meatingpalce. Wal-Mart launched the Express stores in 2011, which emphasized packaged foods and were designed to appeal to shoppers looking for convenience, while Wal-Mart’s Neighborhood Markets stock fresh meat and produce. In January, Wal-Mart announced it would close all 102 of its small-format Express stores while preparing to open more Supercenters and Neighborhood Markets in 2017.

North American Farmers Increasing Rye Plantings on Higher Whiskey Sales

Farmers in North America are turning back to what Reuters calls a neglected crop, sowing fields with the largest rye crop in years as consumers satisfy a growing thirst for whiskey. Rye, planted in autumn and harvested in mid-summer, fell in popularity during the past decade as other crops produced bigger profits. However, with whiskey demand high and new varieties of rye on the market, farmers have regained interest. U.S. farmers planted 1.76 million acres for the 2016-17 season, the biggest area since 1989 and a 12 percent increase from last year, according to the U.S. Department of Agriculture. In Canada, a major rye exporter along with the European Union and Russia, farmers sowed 405,900 acres, the biggest rye area in seven years. Meanwhile, U.S. whiskey sales increased nine percent on the year to $4.1 billion in June, topping the six percent demand growth for total spirits.

Oregon State Fair to Feature Prize Winning Marijuana Plants

The Oregon State Fair this year will feature a unique cash crop for the first time: marijuana. While the annual fair celebrates oddities like the curviest vegetable, this year fairgoers will see prize-winning marijuana plants, according to the Oregonian Newspaper. The Oregon Cannabis Business Council, which sponsors the marijuana exhibit, says nine plants will be displayed in a greenhouse that will have its own entrance and exit and a security guard will monitor the area. Only people 21 and older will be allowed in. Fair officials said the inclusion of cannabis plants is a nod to the newly legal status of the crop. A spokesperson for the Oregon State Fair said feature the state’s marijuana crop shows the fair is moving in the “direction that the entire state is moving." The fair opens August 26th in Salem, Oregon.

Small French Wheat Crop Spurs Speculation That France Will Boost Imports

The smallest French wheat crop in more than a decade is spurring speculation the European Union’s largest producer will have to boost imports to meet its domestic and export demand.

At least one French company is negotiating to bring grain from Romania as heavy rainfall in May and June damaged this year’s crop, according to a trader familiar with the matter, who asked not to be identified because the deal is not yet finalized. French farmers will probably harvest the smallest crop since 2003 and the outlook could still get worst, Offre & Demande Agricole said.

French wheat futures for December delivery have jumped more than 7 percent since reaching this year’s low on July 1 on the Euronext exchange in Paris. That’s widening the gap to prices in other countries including Ukraine and Romania, and boosting the attractiveness of imports for traders looking to benefit from price disparities.

“It is very unusual to see France importing wheat, even more so as early as July, August,” said Benjamin Bodart, a director at adviser CRM Agri-Commodities in Newmarket, England. “Imports may be used to deliver against futures just to profit from the premium of French wheat versus Black Sea wheat.”

Grain Quality

The wheat crop in France will probably fall by 26 percent to 30.4 million metric tons in the 2016-17 season started this month, said Paul Gaffet, an analyst at ODA, a consultancy in Bourges. Production could still be lower than forecast, he said, adding that traders will need to import good-quality wheat from countries in southern Europe to be able to increase France’s export potential.

France usually imports 200,000 to 400,000 tons of wheat a year either from other European countries or from Canada as the nation doesn’t produce the very high-quality grain sometimes needed for baking bread, Nicolas Ferenczi, chief economist at the country’s wheat producers association AGPB, said by phone. While imports are possible given this year’s harvest, it’s too early to say if they will be above average as that will depend on the nation’s export program, he added.

Record Crop

A record crop last year left stockpiles of about 4.9 million tons, an increase of 48 percent from a year earlier, according to FranceAgriMer. As inventories are of high-quality grain, an increase in imports will depend on what production comes to and the nation’s exports, said Ferenczi of AGPB, a member of Paris-based union of French growers Orama, which expects the crop to be anywhere between 30 million and 35 million tons this year.

While analysts keep slashing their forecasts for the French wheat crop, production in the Black Sea region just keeps on getting bigger. Russia will harvest a record 69 million tons in 2016-17, according to Dmitry Rylko, director general of Moscow-based Institute for Agricultural Market Studies, or Ikar. The Ukrainian crop will also be better than previously forecast, said Kiev-based market researcher UkrAgroConsult.

Milling-wheat futures for December climbed 0.9 percent to 169.25 euros ($188) a ton in Paris Thursday. That’s more than $20 a ton higher than the better-quality grain in Ukraine and Romania traded on the physical market, according to data Wednesday from UkrAgroConsult on Bloomberg. French wheat usually has a protein content of about 11 percent, lower than the 12.5 percent quality in the Black Sea region.

Federal Court in Minnesota to Rule on Motion to Dismiss WOTUS Suit

A motion to dismiss the lawsuit over the Environmental Protection Agency's (EPA) Waters of the U.S. (WOTUS) rule will be based on the briefs already filed rather than holding arguments on Aug. 5 according to an order from the U.S. District Court for the District of Minnesota.

In a text-only order issued late July 25 to the attorneys involved in the litigation, the court said it would rely on the "papers" to rule on the Justice Department motion to dismiss the lawsuit in light of a decision by the U.S. Court of Appeals for the Sixth Circuit establishing itself as the proper venue to hear complaints against the rule.

The court's order responds to a joint request made July 15 by attorneys representing the Justice Department and a coalition of cattle ranchers, led by the Washington Cattlemen's Association. The rule remains stayed nationwide as the result of a Sixth Circuit order in October 2015.

USDA Seeking Additional Funding for Farm Loans

The U.S. Department of Agriculture is looking for other funding sources for the Operating Loan Program that helps farmers. The $2.65 billion allocated for the program has already run out, as requests for federal financial assistance grow amid the worst agricultural downturn in more than a decade. USDA is seeking additional funding to “help bridge the gap in farm operating loans as much as possible” until additional funds are available, according to Reuters. The Farm Service Agency last month suggested funding for this fiscal year would be depleted before the program restarts in October. Loans in the program are considered a “last resort” for farmers, but as the rural sector struggles with low commodity prices and mounting trade competition, farmers are increasingly relying on the FSA for loan assistance. Without the financial support, some farmers may struggle to survive until the next cash injection in the fall. Last month, the FSA told Congress it was tapping into $500 million in emergency funding to bolster a related program, the Guaranteed Farm Ownership Loan Program. However, emergency funding options do not exist for the agency's Operating Loan Program. Currently, FSA loans are funding more than 113,000 borrowers, totaling nearly $23 billion.

Senators Ask USDA to Address Organic Livestock Rule Concern Before Publishing Rule

A group of bipartisan Senators has signed a letter to the Department of Agriculture requesting the agency address concerns with the proposed organic livestock and poultry rule before publishing the regulation. Led by Senate Agriculture Committee Chairman Pat Roberts, a Republican from Kansas, 13 Senators in all signed the letter that says “the proposed rule raises significant concerns regarding the impact on current organic poultry and egg producers, as well as access and price for organic consumers.” Further, the group says “proposed changes to outdoor access standards could have a detrimental impact to both animal health and food safety.” Other Senators signing the letter include Agriculture Committee Ranking Member Debbie Stabenow, a Democrat from Michigan. On May 26th, leaders of the Senate and House Agriculture Committees sent a letter requesting an extended public comment period. USDA granted an additional 30 days on June 7th.

AG Department Risk Management Agency Head Says Crop Insurance Program Does Not Interfere With Market Signals

(DTN) -- Reacting to a passage in the Republican Party platform that expresses concern that farm programs interfere with markets, the head of the Agriculture Department's Risk Management Agency said late last week that the crop insurance program does not interfere with market signals.

"We have worked very hard to make sure farmers plant based on market signals," said Brandon Willis, a political appointee.

The occasion was a roundtable for journalists last Thursday organized to provide an update on the growth of the federal crop insurance program over the past seven years, and a forecast of where the Obama administration expects the program to grow.

"If market prices drop, crop insurance prices drop. We have been confident farmers have not planted for the crop insurance program," Willis said.

The Hagstrom Report asked Willis to react to a section in the Republican platform passed last week in Cleveland that says, "Farming and ranching remain high-risk endeavors, and they cannot be isolated from market forces.

"No segment of agriculture can expect treatment so favorable that it seriously disadvantages workers in other trades," the GOP platform said. "Federal programs to assist farmers in managing risk must be as cost-effective as they are functional, offering tools that can improve producers' ability to operate when times are tough while remaining affordable to the taxpayers."

The crop insurance program is costing less than the Congressional Budget Office estimated and is operating on an actuarially sound basis, Willis said. The amount of money that flows into the program from government subsidies and farm premium subsidies is supposed to equal payments and a reserve over time, and the 20-year crop insurance loss ratio is at 0.87.

That performance "speaks volumes" about the performance of the 480 permanent employees that make up the RMA team, he said.

Willis also emphasized that the Obama administration is continuing its program of oversight so that the program will be defensible in Congress when it is attacked.

The improper payment rate -- payments to farmers that are too high or too low -- has been reduced from 5.6% in 2014 to 2.2% in 2015, well below the government-wide improper payment average of 4.39%.

"We have redoubled our efforts to ensure that the crop insurance program is free of abuse," Willis said. "Cutting our improper payment rate in half demonstrates our commitment to operating a well-run program that protects both taxpayers and farmers."

RMA has long spot-checked farmers and companies for improper claims and errors, but the agency is now figuring out an improper payment rate for each of the 17 insurance companies that write policies. Those rates will not be released publicly, Willis said, but will be used to analyze problems that lead to inefficiency.

The agency has used data mining to ferret out farmers and companies that have unusual patterns of crop insurance activity and computer programs will now be used to spot check the nation's 15,000 crop insurance agents and the crop adjusters who determine levels of losses to "identify things that look out of the ordinary," he said.

The information on agents and adjusters will also be used to improve program efficiency, Willis said.

During the Obama years, Willis said, RMA has broadly expanded the program to cover more crops and "to help small and diverse farm operations, organic producers, beginning farmers and ranchers, and those struggling with years of repeated drought and providing the protections they need to continue farming."

In 2016, the federal crop insurance program includes more than 118,000 coverage options for 543 varieties of crops, nearly doubling from the from roughly 64,000 different coverage options that were available in 2009, RMA said in a news release. The total crop insurance liability rose from $79.5 billion to $102.4 billion over the same period, the agency said.

RMA also said:

-- In 2015 alone, the agency was able to help 13,719 beginning farmers and ranchers working more than 3.5 million acres get their operations off the ground and save more than $14 million through reduced premiums and waived fees.

-- RMA estimates that 85% of planted acreage for major crops is now covered by crop insurance, while 73% of planted acreage for eligible specialty crops is covered.

-- The number of acres covered by crop insurance increased from 264.7 million for 2009 to 297 million for 2015.

-- Coverage for fruit, vegetables, and other specialty crops alone has grown from 7.7 million acres in 2009 to nearly 8.3 million acres in 2015.

-- The Supplemental Coverage Option and the APH Yield Exclusion mandated by the 2014 farm bill have expanded quickly to include fruit, vegetables, and other specialty crops.

-- The number of crops eligible for organic premium pricing went from four in 2011 to 57 for the 2016 crop year.

-- The number of acres insured by organic producers grew from 576,700 in 2009 to more than one million in 2015.

-- The number of crops insured under whole farm insurance policies is increasing.

Willis acknowledged that participation in the new cotton STAX program has not been as high as hoped, but he noted that the program is only now in its second year and said he wants to see the results of the program's second year before discussing whether changes to that program might be needed in the next farm bill.

He also said he is not sure why vegetable farmers have not taken out crop insurance policies at the same levels as fruit farmers, but said he and his staff are traveling around the country to meet with farmers where "crop insurance may not be as vibrant as we would like."

The crop insurance program is a partnership of the Agriculture Department, crop insurance companies and agents and farmers. The agents sell the policies for 17 companies. The government pays about 60% of the cost of premiums and the farmers pay the rest. When farmers experience a loss due to weather or market conditions, a claim is made and if it is approved the farmer gets a payment.

Caterpillar Sees No End to Slump

(Dow Jones) -- Caterpillar Inc. said Tuesday it doesn't anticipate a rebound this year for its construction and mining equipment, as the company shrunk its profit forecast and warned of additional layoffs.

Caterpillar topped second-quarter profit and sales expectations. But the Peoria, Ill.-based company sees no end in sight to the four-year-long slide in sales from falling prices for oil and mined commodities and lower demand from key foreign markets.

"We're not expecting an upturn to happen this year," Chairman and Chief Executive Doug Oberhelman said Tuesday.

Caterpillar said anemic economic growth along with geopolitical events that undermine customer confidence such as the Brexit referendum in Britain, the hostile rhetoric from the U.S. presidential campaigns and the attempted coup in Turkey are holding down global machinery demand.

Bayer AG Reports Rise In 2nd Quarter Net Profit

(Dow Jones) -- German pharmaceuticals and chemicals company Bayer AG reported a 19% rise in net profit for the second quarter of 2016, boosted by strong growth at the pharmaceuticals and specialty plastics businesses, while raising its earnings guidance for the full year.

The results come as Bayer is pursuing what would be the largest acquisition in its history -- a $65 billion bid for Monsanto Co.--and investors and analysts are watching closely to see if the German firm has the wherewithal to further up its offer for the U.S. agrochemicals giant.

Monsanto's board earlier this month rejected Bayer's takeover offer for the second time, but indicated it was open to continuing talks.

Bayer's Chief Executive Werner Baumann, on a conference call with analysts Wednesday, said the company had been engaged in "private discussions" with Monsanto and would not make any further public statements at this time. That could suggest that the two companies have signed a non-disclosure agreement, which would allow them to exchange additional information about their businesses privately.

Net profit for the period ended June 30 was EUR1.38 billion ($1.52 billion), compared with EUR1.15 billion during the same period last year, in line with analysts' forecasts. Analysts had predicted a net profit of EUR1.38 billion, according to a recent poll conducted by The Wall Street Journal.

Bayer increased its earnings forecast, saying it aims to increase earnings before interest, taxes, depreciation and amortization, or Ebitda, before special items by a high-single-digit percentage, up from a mid-single-digit percentage. However, the company lowered its sales forecast for 2016, saying it now expects sales in a range of EUR46 billion to EUR47 billion, compared with a prior forecast of sales above EUR47 billion.

Sales dropped slightly, to EUR11.83 billion, held back by all divisions expect pharmaceuticals. Sales at the pharmaceuticals division rose by 5.5%, to EUR4.1 billion, driven by continued uptake of the company's recently launched blockbuster drugs, including anticoagulant Xarelto.

The company's closely watched Ebitda before special items rose by 5.7%, to EUR3.05 billion, driven by the pharmaceuticals business and the specialty plastics unit, recently separated as Covestro AG.

However, at the Crop Science division--the business area most under scrutiny as a result of the bid for Monsanto--Ebitda before special items fell by 8.2%, to EUR663 million, amid difficult market conditions in the agricultural industry. The business experienced strong sales growth in the Asia-Pacific region, the company noted.

"Crop Science was steady despite the weak market conditions," according to Peter Spengler, an analyst at Germany's DZ Bank. He added that the "focus is on new information about Monsanto."

But analysts at Berenberg said that Bayer's "mixed bag" of results "increases the uncertainty around this deal and the appropriate price to pay." The results "are not helpful" for Bayer's bid, they noted.

Mr. Baumann first moved to acquire Monsanto in May, less than two weeks after taking over the top job. At that time, Bayer put forward a bid of $122 a share, or $62 billion, which Monsanto's board rejected. Earlier this month, Bayer raised its bid to $125 a share. Monsanto again rebuffed Bayer's offer, but the U.S. company left the door open to further talks about a tie-up.

Bayer has said it would continue to pursue the deal, despite the concerns of some shareholders that the acquisition would reshape Bayer's portfolio at the expense of its lucrative pharmaceuticals division.

"Our concerns remain the same as the ones we expressed when Bayer's bid first surfaced, namely that the merged company will be left with a highly geared balance sheet and that Bayer's executive team may take their eye off the ball running the pharma business as their energies are focused on integrating Monsanto," said Greg Herbert, a fund manager at Jupiter Asset Management Ltd., a Bayer investor.

Henderson Global Investors--Bayer's 16th-largest shareholder, according to Thomson Reuters--earlier this month called into question whether the deal would create value for investors and urged Bayer to put the deal to a shareholder vote. Bayer has previously said such a move could put the potential deal at risk.

If the deal were to transpire, agrochemicals would account for about half of Bayer's overall sales.

Mr. Baumann's dogged pursuit of Monsanto is a departure from the strategy implemented by his recently departed predecessor, Marijn Dekkers. During his six-year tenure, he invested heavily in health care and tried to balance the company around its so-called life science divisions--pharmaceuticals, over-the-counter drugs and agrochemicals.

Anti-Trade Talks Threaten TPP

With both Candidates for President openly against the Trans-Pacific Partnership, the trade deal could be facing an increasing uphill battle towards getting congressional approval. At the Democratic National Convention this week, chants broke out of “No TPP” while Bernie Sanders was speaking Monday, the same day his party approved its platform which is formally against the trade agreement. Hilary Clinton previously favored TPP while serving as Secretary of State for President Obama, but she changed her stance since beginning her campaign that will accept the nominee as the Democrat’s candidate for President later this week. Republican Candidate Donald Trump also opposed the deal in its current state. During his speech, Senator Sanders, the runner-up to Clinton for the Democratic nod, told the audience “We’ve got to make sure that TPP does not get to the floor of Congress during the lame duck session.” Farm groups favoring the deal are pressing Congress to consider the measure after the November elections. However, Politico says all of the anti-trade campaigning makes it exceedingly difficult to get TPP through an already wary Congress, making passage not impossible but very unlikely.

EPA Sets Scientific Advisory Panel Meeting on Glyphosate

The Environmental Protection Agency will hold a scientific advisory panel meeting this fall to review the widely used herbicide glyphosate. However, the Federal Register notice of the meeting Tuesday offered no indication on whether the panel will consider the conclusions of an EPA assessment that found glyphosate poses no significant cancer risk. DTN reports that the EPA has scheduled the meeting of a Federal Insecticide, Fungicide, and Rodenticide Act scientific advisory panel for October 18th through October 21st in Washington, D.C. The Federal Register notice mentions the conclusions of the International Agency for Research on Cancer in March 2015 that says glyphosate is "probably carcinogenic to humans.” The notice makes no mention of other studies that find the opposite. EPA posted and then removed from its website in May a final report that essentially cleared glyphosate. The agency said the report was posted inadvertently.

Consumers More Worried About Foodborne Illnesses over GMO’s

A new survey shows twice as many consumers lists bacterial foodborne illnesses as their top food safety concern compared to those who fear chemicals, carcinogens, antibiotics use in food animals or GMOs. The International Food Information Council Foundation commissioned the online study in March of more than 1,000 consumers between the ages of 18 and 30. Consumers were asked to choose and rank their top three food safety issues and 29 percent of consumers listed foodborne illness at the top of the list, while just eight percent of consumers listed GMOs at the top, according to Meatingplace. However, when asked, “Have you changed your eating habits because of something you’ve heard or read about food additives and ingredients, chemicals in food, or carcinogens in food?” 40 percent of respondents said yes.

Largest crop volumes in years mean a solid sales strategy is vital

The size of this year’s U.S. winter wheat harvest is far bigger than many producers have seen in years. Farmers need to map out sales carefully to manage around bearish prices expected to linger into the 2017/18 season.

In places such as the High Plains and far western wheat states that typically see 40 bu. per acre in a great year, farmers are experiencing yields of 80 bu., 90 bu. and even 100 bu. per acre, says Arlan Suderman, chief commodities economist at INTL FCStone Financial’s FCM Division.

Protein Premium. Yet a big crop doesn’t come without challenges. The protein level of the crop across all wheat-producing states is low, Suderman says, putting it in competition with corn and grain sorghum for feed buyers’ dollars. Still, the milling characteristics of available protein are “very good,” adds Kim Anderson, Extension economist at Oklahoma State University.

If your crop bucks the trend and has higher protein levels, shop around for the best premium, Suderman says. Export markets are one option. Locally, farmers can sell wheat to livestock feeders, says Tanner Ehmke, senior economist for grains, oilseeds, ethanol and farm supply at Denver-based CoBank. For example, he recently spoke with a hog feeder in western Kansas who is paying for wheat with protein counts as low as 10% at just 90% of the normal cost of corn.

If your crop is big but of average or low protein quality, you have several marketing options for selling new-crop wheat, experts say. One of them is the federal government’s market assistance loan program.

“My recommendation is to put it in the government loan,” Anderson says. “That will give [you] nine months for the market to recover, if it’s going to recover. If not, they’re going to be out storage, which is about 4¢ per bushel per month, and interest is a penny to a penny and a half a month.” 

Sales Strategies. Producers with on-farm storage or storage bags are often opting to keep the crop at their operation into the fall to be hedged. Some producers have taken advantage of the carry in the market by delivering their wheat to the elevator, getting a warehouse receipt and contracting it for 2017 delivery because of the premium offered on 2017 wheat futures.

A weather scare is the shift needed in fundamentals to move wheat prices higher, Suderman says. On the technical side, Kansas City wheat futures need to reach $4.60 before analysts confirm a market bottom.

He advises producers to use a marketing loan to provide cash flow and to be prepared to make sales on rallies. Ehmke suggests making incremental sales over the next four to five months to see if a post-harvest recovery will emerge.  

General Mills Broadens Flour Recall as More Fall Ill

(Dow Jones) -- More flour will be scooped up from store shelves after four additional people were sickened with E. coli infections linked to General Mills (GIS) flour, and the company expanded its nationwide recall. The company voluntarily recalled over 10 million pounds of flour in late May when an E. coli 0121 outbreak tied to flour made at its Kansas City, Mo., plant sickened 38 people. That number has since grown to 46 people, and one has developed an acute form of kidney failure, the CDC said. Another form of E. coli has been tied to the flour, and GIS expanded its recall to include flour produced over two more months. Recalled products now include flour made from Nov. 4, 2015, to Feb. 10.

Written Grazing Lease Important For Tenant And Landlord

(DTN) -- A man is as good as his word, unless it comes to future disputes over a handshake agreements. While some livestock producers may only have a handshake agreement for renting grazing land, having a written lease is important in protecting both the tenant and landlord.

Having a written grazing lease can help avoid future conflicts, according to Kate Binzen Fuller, assistant professor/extension specialist for Montana State University. Fuller recently updated and modified a publication on Grazing Leases, along with Jeff Mosley, MSU professor/extension range management specialist.

"Some of these leases can get pretty complicated, so it's nice to have a document you can look back to, to make sure you know who is responsible for what within the lease," Fuller said.

Some disagreements do end up in court and different states have different laws about whether a written lease is required for it to be enforceable. For those reasons, Fuller advised that producers and landlords brush up on the laws in their particular state. In some states, unwritten leases may be legal, but can be difficult to enforce. Fuller recommended both parties have an attorney go over the lease, or write it with them.

IMPORTANT ELEMENTS OF A GRAZING LEASE

There are a number of elements that are vital to include in a grazing lease, Fuller said.

Grazing leases should contain an accurate property description; not just an address, but actual tract information on the specific parcels of land. A lease should also contain the names, address and emergency phone numbers for all those involved in the lease.

Stocking rates and the kind of animals allowed to graze should be included in a grazing lease. Most leases require the tenant to keep records of turn-on and turn-off dates, the number of livestock grazed, and should submit those records to the landlord at the end of the grazing season.

A grazing lease should also outline who is responsible for maintenance and improvements, such as maintenance of fences, corrals, water development and other structures, as well as range improvements practices such as weed control, seeding, fertilization, etc.

The lease should define the lease rate and how it will be calculated, as well as the method and conditions of payment, when the rent is due and whether insurance is required. It is generally recommended that the lease carry a stipulation requiring the tenant to carry liability insurance for the livestock on the leased property.

Special clauses may also be included regarding the right to terminate the lease if it is breached, or procedures to modify or terminate the lease in case animals need to be removed because of fire, drought, flood or other emergencies.

Lease agreements may also specify prohibited activities such as hunting, fishing or logging. Some leases may specify that the tenant's vehicles only travel on established roads or trails, except to perform weed control or in case of emergency.

Fuller said she encourages people to work through a budget so they know what their break-even is. Tenants should strive to make sure they're not paying more than they are getting out of the lease, and landlords often want to cover the costs associated with maintenance and property taxes.

Lease agreements should be signed, dated and notarized by all parties and it may be a good idea for the signed lease to be filed with the local county clerk's office, so an unbiased third party will have a record of the transaction and so it will show up in a title search.

"I just heard about someone who purchased land unaware there was an outstanding written lease for several years, so they had had to rent to that person," she said.

NEGOTIATING RATES

One of the trickier aspects of negotiating a grazing lease is finding a fair and equitable rate. Unfortunately, Fuller said that for many states, detail on market rates is lacking.

She finds that, at least in Montana, the best information on current grazing lease rates are from the U.S. Department of Agriculture's National Agricultural Statistics Service's website or monthly grazing rates at the NASS Quick State website . However, those statistics may not be entirely representative, as they are averages over a wide range of variable property and could have been in place for a long time. Also, the statistics may not account for fluctuating cattle prices.

Fuller suggested that producers can talk to their extension agents, local lender or neighbors to get an idea of current rates in their area.

TYPES OF LEASE RATES

Lease rates for grazing can be written in a number of ways and should be suited to fit the needs of all parties to the less.

The MSU publication lists several types of grazing leases:

-Per acre lease rates vary with the productivity of the land and lease conditions. The rental rate remains the same for the duration specified, however, the tenant assumes the risk of changes in annual forage production due to weather.

-Per whole tract leases apply to a block of land for a specific annual fee and are normally used if leasing an entire ranch for a specified number of years. These kinds of lease arrangement are also used when the leased land consists of various land types (rangeland, seeded pasture, crop aftermath, forest, etc.)

-Per animal unit month (AUM) leases provide some flexibility for various types of livestock. To eliminate confusion about the definition of an animal unit month (AUM), it may be simpler to write a grazing lease on a per-acre basis, then stipulate the number and kind of livestock allowed. The typical definition of an AUM (what one 1,000-pound animal requires to graze for one month) has caused a great deal of confusion, as most cows now are significantly bigger than that.

-Per head or per pair lease rates typically are monthly or seasonal rates. But since types of livestock can vary greatly in quantities of forage, using AUMS as a common denominator may be a better plan.

-Share of gain lease rates are usually used for seasonally-grazed, weight-gaining livestock such as stocker cattle, replacement heifers and lambs and consist of a charge per pound of gain or a share of the total weight gain for the grazing period.

-Variable leases involve a fixed base rate for the term of the lease, and a variable rate that allows for fluctuations in livestock prices. This type of lease rate is set by considering the relative contribution of both parties to total production costs, as well as livestock prices.

Fuller added that grazing lease rates and their structure are very regionalized.

"I think out here in the west we see a lot more leases that are on a per-AUM basis," she said. "In the Midwest, you hear of more per-acre and per-head leases."

Ag Lenders Helping Producers Restructure Debt during Challenging Prices

A new poll of senior leaders from Midwest Farm Credit lenders by AgriBank shows commodity prices are the greatest challenge facing farm operators. The poll says Farm Credit lenders are responding to the challenge by providing services to restructure the financial situations for farmers. The poll, which was conducted the week of July 11th, was announced Monday at the Ag Media Summit in St. Louis, Missouri. The poll shows 69 percent of senior credit and risk officers from the 17 Farm Credit Associations in the AgriBank District selected commodity prices as the top challenge. The next biggest challenges were input costs, credit availability and adverse weather effects. When asked about the support they are providing to help farmers face those challenges, 86 percent said they are rebalancing borrower debt to bolster working capital. AgriBank is one of the largest banks within the national Farm Credit System, with nearly $100 billion in total assets.

EPA Closing in on Finalizing Pesticide Worker Safety Rule

The Environmental Protection Agency is inching closer to finalizing standards for certifying workers who apply dangerous, restricted-use pesticides to crops. In a Federal Register notice Monday, the agency announced it has sent the rule to the Department of Agriculture for review. The USDA review is required under federal pesticide law, before the measure heads to the White House for a final review, according to Politico. The new standards would require certifications to be renewed every three years and establish new training and licensing requirements. For the first time, the regulations would also set a minimum age requirement of 18 years old for people seeking certification. The proposed rule applies only to those chemicals that pose a high health risk, including the herbicide atrazine.

Syngenta Calls Regulatory Talks Constructive

Leadership for Syngenta calls recent talks with regulatory authorities constructive as the company seeks approval for the merger that allows ChemChina to take over the Swiss-based company. Syngenta officials continue to display confidence that the transaction will be completed in time, according to Bloomberg. Talks with the Committee on Foreign Investment in the U.S. are ongoing, and the goal remains to complete the deal by the end of this year. ChemChina is seeking regulatory approval for the purchase that will make it the world’s largest supplier of pesticides and other crop-care chemicals, although temporarily. The Dow-DuPont merger and Bayer’s possible acquisition of Monsanto will reorder the rankings as the top six suppliers fight for market share and financial power to drive research and new product releases.

Bayer, Monsanto, Still far apart on Merger Agreement

Bayer and Monsanto appear no closer to an agreement than two months ago when the first offer by Bayer went public, according to a new analysis by the St. Louis Post-Dispatch. Bayer recently increased its offer to acquire St. Louis-based Monsanto to $125 a share, or $64 billion. Edward Jones analyst Matt Arnold told the local newspaper he believes Monsanto's board will not accept an offer for less than roughly $140 a share, and he does not think Bayer is willing to go that high. Arnold gets to more than $140 a share by taking Monsanto's estimated operating earnings and multiplying them by 17. That's the multiplier that Monsanto was willing to pay for Syngenta last year. Bayer's offer falls short of that marker, meaning the offer values Monsanto less than the company values a competitor just a year ago. Monsanto said the second Bayer proposal was “financially inadequate and insufficient to ensure deal certainty." Meanwhile, Bayer may not be willing to go much higher as shareholders would rather see Bayer invest in its pharmaceutical business.

Brexit May Help UK Biotech Approval Process

The CEO for Syngenta pointed to Brexit as a boost for the United Kingdom’s crop regulations, saying he sees the referendum vote to leave the European Union as an “opportunity for the UK in agriculture." Erik Fyrwald, Syngenta’s CEO, told the Financial Times in an interview that after Brexit, the UK would implement science-based rules and would help companies more quickly implement new technology. Frywald says “the EU regulatory process is becoming politicized,” delaying implementation of technology. Post-Brexit, the UK would establish its own system separate from the EU version, according to Pro Farmer’s First Thing Today. Frywald says based on recent conversations, the UK will make biotech approval and implementation based solely on science.

July Cattle On Feed Report Shows Feedlot Situation Continues To Improve

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist

The July Cattle on Feed report confirms that the feedlot situation continues to improve in 2016.  Feedlot placements in June were up year over year but less than expected at 103 percent of last year.

June marketings were as expected at 109 percent of last year; the largest June marketing level since 2012.  The July 1 feedlot inventory was 101 percent of last year, up slightly less than expected as a result of the smaller placements.

The result of herd expansion in 2014 and 2015 was a January 1, 2016 estimate of a 5.3 percent year over year increase in feeder cattle supplies. Those feeder cattle began showing up in feedlots with year over year increases in placements the past five months.  Since February, feedlots have placed 572 thousand more cattle compared to the same period last year.

However, over the same period feedlots have accelerated marketings to clean up the backlog that crashed fed cattle markets in late 2015.  Feedlot marketings since February have increased 478 thousand head compared to one year ago.  With the increase in marketings nearly matching the increase in placements, feedlot inventories are growing only slowly.

With a faster turnover rate, feedlots are more current and continue to pull carcass weights down.  In the latest weekly data, steer carcass weights were 875 pounds, 10 pounds less year over year, with heifer carcass weights down five pounds at 798 pounds. 

The Cold Storage report was also released last week and indicated that although beef in cold storage rose counter-seasonally by 1.1 percent from May to June, the June total was still 4.9 percent below year earlier levels. 

Missing from the slate of late July USDA cattle reports was the July Cattle report which would have provided an indication of continued herd rebuilding, heifer retention and the size of the 2016 calf crop.

With the dramatic adjustments in cattle prices in recent months, cattle producers are understandably very concerned about the status of herd rebuilding as they make decisions that will position them for production in 2017 and beyond.  The decision by USDA’s National Agricultural Statistics Service (NASS) to cancel this report this year is a significant disservice to the cattle industry and deprives cattle producers of critical information that will affect them for many months.

In the absence of the mid-year inventory report, other information provides some clues regarding the status of herd expansion. The July Cattle on Feed report also provided quarterly steer and heifer feedlot inventories.  Heifers on feed on July 1 were 4.8 percent above year ago levels, and indicate, as did the larger April quarterly number, that heifer retention is likely slowing down.

Heifer slaughter for the year to date is down 2.7 percent but is growing each month.  Heifer slaughter in June was up 4.8 percent compared to last year, the first year over year increase in monthly heifer slaughter since December, 2013.

Beef cow slaughter is up from year ago levels by 7.9 percent for the year to date and is also accelerating.  June beef cow slaughter increased sharply by 20.5 percent over last year.

Both heifer and beef cow slaughter will inevitably rise as cattle numbers grow but the pace in these recent values suggest that herd expansion slowing down.  Nevertheless, additional beef herd expansion is expected in 2016, albeit at significantly slower pace than 2015. 

The bigger question may be whether herd expansion will continue in 2017.

The faster and sharper contraction in cow-calf returns in recent months makes this a smaller prospect than just a few months ago.  Many evolving demand and supply factors that are currently unknown will determine the trajectory of cattle inventories in the next two or three years.

The cattle industry continues to face tremendous uncertainty including global dynamics, domestic political chaos, and massive market volatility. Unfortunately the failure of USDA-NASS to provide the July Cattle report adds to the uncertainty about the current situation as well as what is to come.

Farm Lending Needs Remain High

The Federal Reserve Bank reports the need for farm lending remained high in the second quarter of 2016, driven by ongoing demand for operating loans. The Federal Reserve’s Agricultural Finance Databook found the total number of non-real estate loans made to farmers in the second quarter increased six percent from a year ago. The report says the prolonged environment of robust lending activity, amid persistently weak profits in the farm sector, has led to slight reductions in the performance of agricultural loans at commercial banks. Although the share of troubled loans has remained low from a historical perspective, the Fed says an increase in loans 30 to 89 days past due could be an early indication that borrowers are struggling to repay loans in amid tight profit margins. Despite the slight declines in loan performance and heightened risk, however, profitability at agricultural banks generally has remained strong, according to the report. The Agricultural Finance Databook is a quarterly compilation of national and regional agricultural finance data by the Federal Reserve Bank.